ENT 6800 Module: Analysis of Elon Musk's SpaceX and Tesla Ventures

This case study analyzes Elon Musk's entrepreneurial ventures, SpaceX and Tesla, focusing on the challenges and performance of each. The analysis begins with an introduction highlighting the role of innovation in entrepreneurship and Musk's aim to advance society through innovative business approaches. Task 2 delves into three key entrepreneurial challenges faced by SpaceX, including commercial market stagnation, limited military market access, and substantial capital requirements. Task 3 evaluates Musk's entrepreneurial performance and shortcomings in his investment in Tesla, examining his innovative business ideas, the quality of electric cars, diversification efforts, and leadership, while also addressing challenges like meeting customer demand, single-representative limitations, manufacturing difficulties, and high-volume manufacturing impacts. The report concludes by emphasizing the importance of an innovative approach for business success and competitive advantage, highlighting Musk's contributions to society and the industry through his ventures. References to books and journals used in the analysis are also provided.

INNOVATION AND ENTREPRENEURSHIP
1

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 2............................................................................................................................................3
Analyse the three entrepreneurial challenges that Elon Musk’s SpaceX venture will face........3
TASK 3............................................................................................................................................5
Critical evaluation of Elon Musk entrepreneurial performance and shortcomings during his
investment in Tesla.....................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7
2

INTRODUCTION
Innovation in entrepreneurship helps an entrepreneur in forming innovative ideas through
which they can make their business highly competitive and build a strong customer network
through which organisation can gain competitive advantage from their operations (Campbell,
2019). Elon Musk is a American entrepreneur who aims to introduce business ventures by using
some innovative approaches through which they can contribute to the advancement of the society
and for getting maximum competitive advantage for their business. This project report is based
on the Entrepreneurial venture which are introduced by Elon Musk. This report also highlights
entrepreneurial performance and shortcomings during his investment in the venture which was
introduced by him.
TASK 2
Analyse the three entrepreneurial challenges that Elon Musk’s SpaceX venture will face
Elon Musk is the entrepreneur and founder of SpaceX which is a rocket company with
an aim to launch humanity's first ride to Mars. SpaceX is an entrepreneurial venture of Elon
Musk following Tesla electric car and electricity ventures. The study revolves around the
entrepreneurial challenges that will be faced by the SpaceX venture of Elon Musk. Musk does
not want interference of outsiders in this venture and hence this is the reason behind the venture
not being public. Whether the venture goes Public or private, there are some serious challenges
which need to be overcome. The challenges are as follows-
 Commercial market stagnation: The global market for the commercial space launches
is quite small. The market share of space launches in global market is analysed around $
6 Billion per annum. SpaceX is launched with the aim to capture and dominate the
market by offering the cut rate prices for placing the communication satellites in
geosynchronous orbit (Cunningham and et.al, 2019). Geosynchronous orbit is an orbit
which enables the satellites to remain above a specific point on the Earth's surface in-
spite of travelling at a speed of as high as thousands of miles per hour in order to match
the rotation of the planet. SpaceX claimed almost half of the market which led to the
stagnation of the geo satcom. Arianespace is the biggest launch competitor of SpaceX in
the commercial market which just needs ten per year to remain viable. Lower demand is
3

considered as the new normal and hence the suppliers have started to bail but the number
of launch providers, particularly the state backed providers has increased.
 Military market access: The management of national security space programs is
conducted by the U.S Air force and was recently awarded the development contracts for
the launch of new generation vehicles (Ding, 2017). Among the four competitors,
SpaceX was the only company which did not receive any award. This situation can be
considered as a disappointment for Elon Musk who had to struggle a lot for years in
order to get the Military launch certification for SpaceX's workhouse Falcon 9 rocket. It
appears that the U.S. Air force was not convinced with the plans for the successor to
Falcon 9. SpaceX still has a chance to compete in the second phase of the program but it
looks like the government does not seem to fund in the development of a new launch
vehicle or rocket engine for SpaceX. The vehicle was previously known as the Big
falcon rocket, it is the pivotal to SpaceX's plans for the future and it is reflected by a new
name, “Super Heavy Starship”. It is estimated to be build as the biggest rocket ever
which will be suitable for supporting the man missions on the Mars but the air force was
expecting something different, like an upgraded Falcon 9. Hence with the above
explanation it is understood that the Military access plays a crucial role in SpaceX
venture whereas it a huge challenge too.
 Oversized capital requirements :Travelling to Mars is quite expensive as this process
requires different types of costly equipments or tools which are currently not into
existence. SpaceX venture had expectations from the U.S. Air force that it would
accommodate to foot the bill for developing its super heavy starship which is capable of
lifting hundreds of astronauts at once but the outcome of the recent military launch
competition was not as per the expectations of the SpaceX venture. As a result, the
SpaceX venture will have to now gather the necessary funds internally or seek for the
outside sources of financing (Dodgson and Gann, 2020). The venture has decided on a
plan to orbit approximately of 7500 small satellites in a form of constellation which will
be capable of providing broadband internet services with an access to any location on
Earth. This is expected to provide big revenue opportunities to the SpaceX venture
outside the launch scenarios. But in the present situation, the plan to orbit satellites
requires a huge amount of investment funding. The risks are difficult to identify and can
4

cause huge losses, hence other companies have already dropped the idea to pursue this
project.
TASK 3
Critical evaluation of Elon Musk entrepreneurial performance and shortcomings during his
investment in Tesla
The investment of Elon Musk in Tesla aimed to provide electric vehicles which are based
on energy and through which they can initiate towards a sustainable environment. Through
investing in Tesla, it was an entrepreneurial movement through which they focused on providing
on energy efficient cars and solar panels through which they can contribute in the society by
using eco-friendly approaches (Elert, Henrekson and Stenkula, 2017). The evaluation of Elon
Musk entrepreneurial performance and shortcomings which were faced by them during the
investment in their business venture Tesla, are states below:
Entrepreneurial performance:
 Innovative business idea- As Elon Musk came up with an innovative idea through which
he can bring something new to the society. The company used a very innovative
approach through which they introduced electric cars, solar panels as this was a initiative
through which they focused on saving energy and making a sustainable movement in the
society.
 Best quality electric cars- Through introducing the electric cars, it was the most
innovative approach through which they can bring something new to the society. Elon
Musk focused on bringing something new to the industry through which he can make
differentiation and give huge competition to other companies in the industry(Leal-Millán
and et.al, 2018).
 Diversification- Through introducing energy based cars and solar panels, the company
also provided insurance programs for their vehicles through which they can ensure their
customers that their investment in the cars manufactured by Tesla was the right choice
and will provide them maximum satisfaction by purchasing the cars.
 Leadership and guidance- With the help of guidance of Elon Musk, the company Tesla
made a huge impact on the society and on the industry as he used an innovative and
unique idea through which he can accomplish the organisational objective.
5

Shortcomings:
 Inability to meet customer demand- The company was unable to meet the customer
demand as they manufactured cars which are at higher cost. Due to increase price, it was
the major setback which was faced by Tesla as they were unable to meet the customer
demand and requirements (Medeiros and et.al, 2020).
 Single representative limited supply- As Elon Musk is the single representative of Tesla,
it was a huge barrier for the company to attract the customers. All the responsibilities
were handled by Elon Musk which also affected the performance of the company and it
also created a gap between the customers and the organisation.
 Lack of effective manufacturing- There were many complications which were faced by
the companies in manufacturing the products. As the idea was new so the company faced
many complications in manufacturing the cars (Schmitz and et.al, 2017).
 High volume manufacturing- Due to manufacturing on higher volume this affected the
profits of the company. As the company manufactured cars on higher volume and was
unable to sell the products which made company face huge loss and low investment was
made.
CONCLUSION
From the above project report, it can be concluded that having an innovative approach is
helpful for running a business for longer period of time. Through using innovation in business,
entrepreneurs can gain competitive advantage and maximum profit can be earned which will also
help in maintaining goodwill in marketplace. Elon Musk is one of the biggest entrepreneur who
have introduced many business ventures which are innovative and through which they can
contribute in the welfare of the society and bring something new and different to the industry.
6

REFERENCES
Books and journals
Campbell, B., 2019. Practice Theory in Action: Empirical Studies of Interaction in Innovation
and Entrepreneurship. Routledge.
Cunningham, J. A and et.al., 2019. The impact of university focused technology transfer policies
on regional innovation and entrepreneurship. The Journal of Technology Transfer.
44(5). pp.1451-1475.
Ding, Y. Y., 2017. The constraints of innovation and entrepreneurship education for university
students. Journal of Interdisciplinary Mathematics. 20(6-7). pp.1431-1434.
Dodgson, M. and Gann, D., 2020. Philanthropy, Innovation and Entrepreneurship. Springer
Books.
Elert, N., Henrekson, M. and Stenkula, M., 2017. Institutional reform for innovation and
entrepreneurship: An agenda for Europe. Springer Nature.
Leal-Millán, A and et.al., 2018. The route towards sustainable innovation and entrepreneurship:
An overview. Sustainability in Innovation and Entrepreneurship, pp.1-9.
Medeiros, V and et.al., 2020. Innovation and entrepreneurship as drivers of economic
development. Competitiveness Review: An International Business Journal.
Schmitz, A and et.al., 2017. Innovation and entrepreneurship in the academic setting: a
systematic literature review. International Entrepreneurship and Management Journal.
13(2). pp.369-395.
Zhao, S., Zhang, H. and Wang, J., 2018. Cognition and system construction of civil engineering
innovation and entrepreneurship system in emerging engineering education. Cognitive
Systems Research. 52. pp.1020-1028.
7